Wednesday, August 24, 2016

“…The
compensation issues affecting the worsening teacher shortage concern relative
teacher pay—that is, teacher pay compared with the pay of other career
opportunities for potential and current teachers. For over a decade, starting
with How Does Teacher Pay Compare (Allegretto, Corcoran, and Mishel 2004), we
have studied the long-term trends in teacher pay. We followed this up with The
Teaching Penalty, published in 2008 using 2006 data, and have updated our findings
occasionally in other papers. Our body of work has documented the relative
erosion of teacher pay. In 1960, female teachers enjoyed a wage premium
compared with other college graduates. By the early 1980s, the teacher premium
became a penalty, and the female teacher pay gap post-1996 has widened
considerably.

“Here
we extend our analysis through 2015 and update our work on both wages and total
compensation (wages plus benefits). (Note that throughout this report, ‘pay’ is
used as a generic term to refer to wages or compensation.) With this update, we
continue to document trends in relative teacher pay and sound the alarm
regarding the long-run growth in the wage and compensation penalty (also
referred to in this report as a wage or compensation ‘gap’)—the percent by
which public school teachers are paid less than comparable workers.
Specifically:

“Average
weekly wages (inflation adjusted) of public-sector teachers decreased $30
per week from 1996 to 2015, from $1,122 to $1,092 (in 2015 dollars). In
contrast, weekly wages of all college graduates rose from $1,292 to $1,416 over
this period.

“For
all public-sector teachers, the relative wage gap (regression adjusted for
education, experience, and other factors) has grown substantially since the
mid-1990s: It was ‑1.8 percent in 1994 and grew to a record ‑17.0 percent in
2015.

“The
relative wage gap for female teachers went from a premium in 1960 to a large
and growing wage penalty in the 2000s. Female teachers earned 14.7 percent more
in weekly wages than comparable female workers in 1960. In 2015, we estimate a ‑13.9
percent wage gap for female teachers.

“The
wage penalty for male teachers is much larger. The male teacher wage gap was
-22.1 percent in 1979 and improved to ‑15.0 percent in the mid-1990s, but
worsened in the late 1990s into the early 2000s. It stood at ‑24.5 percent in
2015.

“While
relative teacher wage gaps have widened, some of the difference may be
attributed to a tradeoff between pay and benefits. Non-wage benefits as a share
of total compensation in 2015 were more important for teachers (26.6 percent)
than for other professionals (21.6 percent). The total teacher compensation
penalty was a record-high 11.1 percent in 2015 (composed of a 17.0 percent wage
penalty plus a 5.9 percent benefit advantage). The bottom line is that the
teacher compensation penalty grew by 11 percentage points from 1994 to 2015.

“The
erosion of relative teacher wages has fallen more heavily on experienced
teachers than on entry-level teachers. The relative wage of the most
experienced teachers has steadily deteriorated—from a 1.9 percent advantage in
1996 to a 17.8 percent penalty in 2015.

“Collective
bargaining helps to abate the teacher wage gap. In 2015, teachers not
represented by a union had a ‑25.5 percent wage gap—and the gap was 6
percentage points smaller for unionized teachers...

“The
opportunity cost of becoming a teacher and remaining in the profession becomes
more and more important as relative teacher pay falls further behind that of
other professions. The large negative wage gap for male teachers likely is a
key reason why the gender mix of teachers has not changed much over time. That
women, once a somewhat captive labor pool for the teaching profession, have
many more opportunities outside the profession today than in the past means
that growing wage and compensation differentials will make it all the more
difficult to recruit and retain high-quality teachers. Moreover, the ever-increasing
costs of higher education and burdensome student loans are also a barrier to
the teaching profession in light of a widening pay gap.

“The
recent trends we document represent only a small part of a much larger long-run
decline in the relative pay of teachers. U.S. decennial Census data show that
the wage gap between female public school teachers and comparably educated
women—for whom the labor market dramatically changed over 1960–2000—grew by
nearly 28 percentage points, from a relative wage advantage of 14.7 percent in
1960 to a disadvantage of 13.2 percent in 2000. Among all (male and female)
public school teachers, the relative wage disadvantage grew almost 20
percentage points over 1960–2000 (Allegretto, Corcoran, and Mishel 2008, 7).
Our results show that the teacher wage penalty grew an additional 7.0 and 9.6
percentage points, respectively, for all and female teachers since 2000.15

“Improvements
in the non-wage benefits of primary and secondary school teachers partially
offset the worsening wage disparities: The weekly total compensation (wages
plus benefits) disadvantage facing teachers in 2015 was about 11 percent, or
roughly 6 percentage points less than the 17 percent weekly wage disadvantage
estimated for that year. It is good news that teachers are able to bargain a
total compensation package—as it seems they may have forgone wage increases for
benefits recently. But, as we’ve documented, teacher wages have been stagnant
since the mid-1990s. This makes the wage gap, on its own, critically important,
as it is only earnings that help to make ends meet regarding pecuniary expenses
such as rents, food, and paying off student loans…

“If the policy goal is to improve the
quality of the entire teaching workforce, then raising the level of teacher
compensation, including wages, is critical to recruiting and retaining
higher-quality teachers. Policies that solely focus on changing the composition
of current compensation (e.g., merit or pay-for-performance schemes) without
actually increasing compensation levels are unlikely to be effective. Simply
put, improving overall teacher quality requires correcting the teacher
compensation disadvantage” (Think Teachers Aren’t Paid Enough? It’s Worse Than You Think by Valerie Strauss (Washington Post, August 16)).

About the authors:

Sylvia A. Allegretto
is a labor economist and chair of the Center on Wage and Employment Dynamics,
which is housed at the Institute for Research on Labor and Employment at the
University of California, Berkeley. She is also a research associate of the
Economic Policy Institute and is co-author of many EPI publications, including
past editions of The State of Working America, How Does Teacher Pay Compare?,
and The Teaching Penalty: Teacher Pay Losing Ground. She has a Ph.D. in
economics from the University of Colorado at Boulder.

Lawrence Mishel, a nationally recognized economist, has been
president of the Economic Policy Institute since 2002. Prior to that he was
EPI’s first research director (starting in 1987) and later became vice
president. He is the co-author of all 12 editions of The State of Working
America. He holds a Ph.D. in economics from the University of Wisconsin at
Madison, and his articles have appeared in a variety of academic and
non-academic journals. His areas of research are labor economics, wage and
income distribution, industrial relations, productivity growth, and the
economics of education.

— The authors thank Saika Belal and Jessica
Schieder for their valuable contributions to this report.

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